Gallon Environment Letter – the daily edition – a policy letter from the Canadian Institute for Business and the Environment

Time for disinvestment from high carbon assets, says UN climate chief

“Institutional investors who ignore the risk [of climate change] face being increasingly seen as blatantly in breach of their fiduciary duty to their beneficial owners – men and women who have worked hard all their lives to put away something for their retirement and for their children,” Christiana Figueres, Executive Secretary of the United Nations Framework Convention on Climate Change told attendees at the 2014 Investor Summit on Climate Risk at UN headquarters in New York this week.

In urging investors to move out of high-carbon assets and into assets built on renewable energy, energy efficiency and more sustainable ways of business that green global supply chains, she urged investors to accelerate the greening of their portfolios as one crucial step towards a low-carbon economy that can better cope with the threats and seize the opportunities from climate change. “Investment decisions need to reflect the clear scientific evidence, and fiduciary responsibility needs to grasp the intergenerational reality: namely that unchecked climate change has the potential to impact and eventually devastate the lives, livelihoods and savings of many, now and well into the future,”

She specifically called on institutional investors “to request companies they are invested in to disclose their carbon footprint and potential stranded assets such as those linked to the mining, exploration and burning of fossil fuels, and for members of pension funds to hold their trustees to account in this respect.

According to the International Energy Agency, $36 trillion of global investment in clean energy will be required by 2050 to meet the internationally agreed goal of limiting global temperature rise to less than 2 degrees Celsius. A major opportunity for investors to show their commitment to supporting low-carbon policies will be ahead of and during the UN Secretary-General’s Climate Summit in September 2014, which is anticipated to build momentum for a strong global climate agreement in 2015.